We are seeing a continuing improvement in national housing affordability, due to a combination of lower house prices, wage growth and lower interest rates. The Housing Industry Assn’s index of affordability shows Brisbane up 2.6% and all other capitals also improved. Confirmation of this data is in first home buyers purchasing – 28.6% of home lending in May was to this group, a seven year high.
While home lending nationally is down 21% on last year, it is likely the next quarter will show the recovery in lending and prices that is occurring as a result of tax cuts, the easing of APRA’s restrictive lending policies, and the Federal Government’s First Home Buyers Deposit Scheme, along with impacts at State level.
On the bayside, we have seen an increase in the number of properties being listed in July, with more to follow in the next month or two. With buyers getting more serious there have been a good number of million dollar sales on the bayside. Place Manly continues to be asked to find properties for buyers who don’t feel they have a sufficient range available to make a decision yet.
- Home affordability – highest level for seven years.
- Interest rates – further cut by 0.25%. Another reduction forecast to come in the next quarter. Home loans under 3% are now available (usually for a fixed term of 3 years).
- Mortgage Lending – APRA is easing the “serviceability buffer” for loans to 2.5% above the loan rate. In practice, buyers will be able to borrow around 10% more than a year ago.
- Deposits for First Home Buyers – Government has announced a proposed scheme for encouraging FHB with only 5% of deposit without mortgage insurance requirement.
- Capital gains tax and negative gearing – no changes. Investors are back in the market.
- Economy – while the housing market is still weak in Sydney, Melbourne and Perth, there are signs of improvement, and Brisbane is forecast to increase by 4-5% over the next 12 months. Increasing internal migration and potential economic growth with the Adani approval will benefit the bayside property market because of its proximity to the airport and new families moving into the area.
WAKERLEY: 60 sales YTD, 6 sales over $1M, top sale $1.1M.
MANLY WEST: 89 sales YTD, 1 sale over $1M, top sale $1.18M
GUMDALE: 16 Sales YTD, 7 over $1M, top sale $2.6M